Tax Cases Weekly Round-Up: 2 April to 8 April, 2023

Supreme Court Memorandum Issued By The Government To Deduct 4% TDS Is Not Ultra Vires To Tripura Sales Tax Act: Supreme Court Case Title: The State Of Tripura Versus Chandan Deb Citation: 2023 LiveLaw (SC) 280 The Supreme Court has held that the liability to pay the tax shall be on the transferor who transfers the right to use any goods as per proviso to Section 3(1) read with Section 2(b) and 2(g) of the Tripura Sales Tax Act (TST Act). Issuance Of Corporate Guarantee On...

Subsidized Deduction Made From The Employees Availing Food In The Factory/Corporate Office Would Not Be Considered A 'Supply' Under GST: AAR

The Gujarat Authority for Advance Ruling (AAR) has held that a subsidized deduction made by the applicant from the employees who are availing food in the factory or corporate office would not be considered a 'supply' under the GST Act.The bench of Amit Kumar Mishra and Milind Kavatkar has observed that input tax credit (ITC) will be available to the applicant on the GST charged by the service provider in respect of canteen facilities provided to its direct employees working in their factory and...

Non-Compete Fee Related To Profession Is Made Taxable Only w.e.f. AY 2017-18: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that a non-compete fee related to a profession is made taxable only with effect from AY 2017–18, and the non-compete fee in relation to a profession for periods prior to AY 2017–18 would be treated as a capital receipt.The bench of Astha Chandra (Judicial Member) and Shamim Yahya (Accountant Member) has decided in favor of the Assessee-doctor holding that the department has erred in looking beyond the service agreement entered...

One Time Premium Received On Allotment Of Completed Commercial Units/Building Attracts 18% GST: AAR

The Gujarat Authority for Advance Ruling (AAR) has held that a one-time premium received by the applicant on allotment of completed commercial units or buildings attracts 18% GST.The two-member bench of Amit Kumar Mishra and Milind Kavatkar has held that the one-time premium received by the applicant on allotment of completed commercial units or buildings is a taxable supply in terms of Section 7 of the CGST/GGST Act, 2077.The applicant is engaged in a business relating to the construction of...

Madras High Court Quashes Reassessment Made After The Limitation Period

The Madras High Court has held that the assessment was reopened on the basis of the error pointed out by the revenue audit, but it was done after the period prescribed under Section 147 of the Income Tax Act.The bench of Justice R. Mahadevan and Justice Mohammed Shaffiq has observed that reopening the assessment in light of factual errors pointed out by the audit party is permissible under the law.The respondent/assessee is a hereditary of the Raja of Pudukottai, and he is assessed to pay tax in...

Person In Whose Custody The Goods Are Found To Produce Information Within A Reasonable Time: Delhi High Court

The Delhi High Court has held that it would be open for a person found in the custody of goods to produce the relevant information in its possession with respect to the goods within a reasonable time on being required to do so by the Commissioner.The bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that none of the authorities have even examined whether the documents produced by the appellant established the ownership of the goods in question.The issue raised was whether the...

In Absence Of Proper Show Cause Notice To The Assessee, There Is No Merit In Levy Of Penalty: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal has held that where the initiation of penalty is one limb and the levy of penalty is another limb, then in the absence of proper show cause notice to the assessee, there is no merit in the levy of penalty.The bench of Anil Chaturvedi (Accountant Member) and Yogesh Kumar Us (Judicial Member) has relied on the decision of the Bombay High Court in the case of CIT vs. Samson Perinchery and has held that where the initiation of penalty is one limb...

Cenvat Credit Available On Books Of Account Cannot Be Rejected Without Following Due Procedure: CESTAT

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that unless CENVAT Credit availed by the appellant has not been recovered by way of the issue of a show cause notice invoking Rule 14 of the CENVAT Credit Rules, 2004, CENVAT Credit available on the books of account cannot be rejected when it is accumulated on account of export of service.The two-member bench led by Anil G. Shakkarwar (a technical member) has set aside the order rejecting the refund of...

Section 263 Income Tax Act | Erroneous Order Of Assessing Officer Causing Prejudice To Revenue Is Revisable By CIT : Supreme Court

The Supreme Court has held that the Commissioner of Income Tax can exercise revision powers under Section 263 of the Income Tax Act over the orders of the Assessing Officer which cause prejudice to the interest of the revenue.The Top Court set aside the Bombay High Court’s order where the High Court had ruled that the amount paid by the assessee to its shareholders in lieu of settlement of litigation in pursuance of an arbitral award, was deductible from the sale proceeds of the property...

Punjab And Haryana High Court Directs To Refund Tax Collected Illegally With 6% Interest

The Punjab and Haryana High Court has held that if the tax is collected without any authority of law, the same would amount to depriving a person of his property without any authority of law and would infringe on his right under Article 300 A of the Constitution of India.The bench of Justice Ritu Bahri and Justice Manisha Batra has observed that no receipt was given by the proper officer after accepting the amount. The amount deposited by the petitioner under protest was liable to be refunded as...

Employer’s TDS Obligation Under New ‘Default’ Personal Tax Regime: CBDT Issues Clarifications

The Central Board of Direct Taxes (CBDT) has issued clarification regarding the deduction of TDS under Section 192 read with sub-section (IA) of Section 115 BAC of the Income-tax Act.Section 115 BAC of the Income-tax Act, 1961, has been amended by the Finance Act of 2023 to include a sub-section (lA), which establishes a new tax structure that will take effect for assessment years starting on or after April 1st, 2024. The regime is applicable to an individual, a Hindu undivided family, an...

Issuance Of Corporate Guarantee On Behalf Of Group Companies Without Consideration Is Not A Taxable Service: Supreme Court

The Supreme Court has held that the issuance of a corporate guarantee on behalf of group companies without consideration is not a taxable service.The division bench of Justice Hrishikesh Roy and Justice Manoj Misra has observed that, as there is no consideration involved, no service tax would be assessed on the corporate guarantees given by a parent company to its subsidiaries.The department has challenged the dropping of proceedings initiated against the assessee, M/s Edelweiss Financial...